School district preparing for 2017-2018 budget

The Horry County School Board’s finance committee on Dec. 12 started discussing the 2017-2018 budget, accounting for expected increasing operating costs.

Funds have already been allocated for the Short Term Capital Projects Plan that goes through 2024, said Horry County Schools Chief Financial Officer John Gardner. The capital projects are paid for predominately by bonds and the Education Capital Improvements Sales and Use Tax, also known as the penny sales tax, which can only be used to fund capital projects such as construction, but not operating costs.

Our challenge is that our revenue is not growing proportionally with present expenditures.

John Gardner, Horry County Schools chief financial officer

Property taxes on owner-occupied homes, businesses, landowners and the penny sales tax are used to pay back the principal and interest on those bonds, said Gardner.

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There’s a lot of conversation about a lot of things that facility-wise we would like to see done. Now those are going to take dollars.

John Poston, Horry County School Board District 8

“Our challenge is that our revenue is not growing proportionally with present expenditures,” said Gardner. “Locally, our tax revenue has not grown at that pace for operations. We’ve seen somewhat of a flat curve. If 80 percent of your budget is salaries and benefits, and you’re getting a mandate that you’ve got to give a 2 percent increase and your revenue isn’t growing by 2 percent, you can see you’ve got a gap there.”

Gardner said he didn’t know how much the general fund budget (contained within the operations budget) would increase, but the 2016-2017 general fund budget was $389,023,451. The capital budget was more than $328 million, and the comprehensive budget that year was almost $807 million.

If 80 percent of your budget is salaries and benefits, and you’re getting a mandate that you’ve got to give a 2 percent increase and your revenue isn’t growing by 2 percent, you can see you’ve got a gap there.

John Gardner, Horry County Schools chief financial officer

District policy is to hold 15 percent of its general fund without spending it, and any leftover funds over that threshold are considered to be “unassigned” funds that the board of education may allocate for other purposes. During the 2015-2016 school year, the district had more than $23 million in unassigned funds.

Incoming Horry County School Board Finance Committee Chairman John Poston of District 8 said he wanted to look at the amount of unassigned funds left over from the general fund each year to determine whether or not there was a trend of having extra money, although unspent unassigned funds roll over into the next year’s budget.

While the Short Term Capital Plan has been funded through 2024, there may be additional construction projects that could take additional board-approved tax dollars.

Executive Director of Facilities Mark Wolfe, who had previously said there were almost $10 million in unfunded proposed building modification and upkeep projects, last week presented the board with an updated list in order to stay within this year’s budget and said the rest of the projects could be done during the next fiscal year.

Board member Janet Graham presented the board with more than $1.3 million in unfunded projects for Conway-area schools.

According to a study conducted in January, there are more than $8 million in unfunded potential upgrades to some of the district’s athletic facilities.

“There’s a lot of conversation about a lot of things that facility-wise we would like to see done,” said Poston. “Now those are going to take dollars. We could wait, and maybe funds could become available. We’ve got a lot of different tools. But I want the facilities and finance committees to have the tools on the table. So we have that serious conversation and raise our hands to say ‘if we’ve got to do this now, here’s how we’ve got to do it.’”